Just What Is Fairness, Anyway? (Part II)

My sister laid out a plank and I am now going to step out onto it and lay the next plank. She asserts that left-wingers ultimately think only of equality of results – I’d add that if this premise is correct, it also explains their singular emphasis on the individual’s rights, rather than on the impact an individual has on others (think abortion rights, their use of the commerce clause, and their use of their right to free speech), since a fair outcome depends on every adult individual being paramount – it depends on a selfish way of thinking.

But before I go too far into that, I think some insider perspective helps illuminate the minds of leftists. I’ve taken it upon myself to overcome some of my tendencies toward frustration and anger when debating a left winger, take deep breaths, try to stay calm, and debate them as though their intellectual positions were equal. I personally don’t think they are, but I believe in fairness too…I want to give my left wing friends a chance to make their core beliefs known without jumping down their throat even if what I hear frightens me.

I’ve had three such discussions with three different leftists in the last few weeks. I’ll alter their names to protect their identity (it’s only fair).

We’ll call our first guest Nina. She and I had a lengthy discussion about the necessity of government’s place in enforcing social responsibilities. I will simplify the structure of the discussion a bit since Nina has a tendency to ramble, repeat herself, and go off-topic on occasion when she’s in a hyper mood.

An important bit of info about Nina – she is a very hard-core progressive. Her mother is a force of nature who has indoctrinated her all her life with a select few sources of news and information and she is not yet mature enough, I believe, to challenge those theories and assertions, though I do see some signs of progress on that front. I feel it important to bring this up so that it is clear that our first guest is not a mainstream Democrat. Mainstream Democrats will get to talk shortly. Here, in a nutshell, is how my conversation on taxes, fat cats and corporate America went.

NINA: Did you know that there is an upper limit of $100,000 on the payroll tax…and if they eliminated that limit, social security would be completely paid for? It’s ridiculous that the cap is that low!

ME: Even if that were true, which I don’t believe it is (that eliminating the cap would solve SSA’s insolvency), the payroll tax doesn’t reach the personal wealth of most of America’s wealthiest people. Raising or eliminating that cap will primarily hurt middle-market investors, small business owners and the upper middle class.

NINA: You would have to eliminate that cap and then tax luxury and consumption as well, but the wealthiest in this country have to pay themselves somehow. I’ve heard stories about businessmen going out to dinner and spending 60 thousand dollars in one meal! Or 10 thousand on a shower curtain! That’s disgusting! I make 20 thousand in a year if I’m lucky! They shouldn’t get to spend three times my salary in one night and not contribute substantially to their social obligations!

ME: So you want to tax investment (through capital gains taxes), consumption (through luxury taxes), income (through a much more progressive income tax structure), payroll (with no limit on the amount of payroll that can be taxed), sales (through state sales taxes), property (especially large estates since you don’t want to eliminate the estate tax), luck (windfall taxes), energy (gas taxes, carbon taxes, etc)…what don’t you want to tax? And how can we stay productive that way?

NINA: I think that people like us who make a normal living don’t understand the concept of percentages. I hear all the time that the wealthiest X percent are paying some huge share of the tax burden, but they don’t get it. 50% of my pay being lost would kill me, but to them, it has no affect at all! They can afford to give up more without even noticing a difference!

ME: I think the problem with that position is that when you tax the wealthy because they can afford to be taxed, it reduces the amount they’re willing to spend on their businesses, their personal lifestyle and their properties. Let’s go back to your shower curtain example. I know you love the art world. Some artist crafted that fine shower curtain. If all of the wealthiest among us were taxed at the rates you’re proposing, do you think that artisan would find enough work to survive? What about that dinner? Someone grew the grapes for that $3,000 bottle of Pinot Grigiot, and someone sold cattle to become the $8,000 steak tar tar and someone is running the restaurant that caters to these kinds of upscale clients. And there some lucky waiters working at that restaurant who’ll get more in tips that night than many waitresses make in a month at Applebees. And the chef is being paid handsomely, which means he can afford to take his family to the Grand Canyon next winter! Do you see what I’m driving at?

NINA: But what percentage of all of that wealth being thrown around so grotesquely by the fat cat stock brokers and hedge fund managers is actually going to the artisan or the waiter? It may seem like a good thing to them, but they’re getting a PITTANCE of the wealth needed to enjoy that kind of opulent lifestyle. We should be supporting them, not bribing them with underpaid work.

ME: Now who doesn’t understand percentages? Who cares whether the profits from such transactions aren’t mostly going to the artisan? He has to make a living and the pittance he gets is probably enough to keep his family very happy! If the shower curtain cost $2,000 to make and he sells it for $4,000 to a decorator who then sells it to the rich guy for $10,000 since the middle-men always take a higher profit margin, then the artisan made $2,000 in one day (it would take me a month to make that)…and the middle man made $6,000 in one day…and the rich guy got what he wanted and paid a lot for it. And everyone was happy! That $2,000 made by the artisan is a pittance in ratio terms, but it pays his bills for weeks! And he gets to do this multiple times a year I’m sure. And what of the pittance paid to the maids and tutors and drivers and pilots and butlers and gardeners and landscapers and decorators who maintain the fat cat’s enormous mansions? How many people do you think Bill Gates employs OTHER THAN his corporation which employs hundreds of thousands worldwide? It turns out that Mr. Gates requires a personal staff some 600 people deep! Those are 600 people who have a job…who wouldn’t if it weren’t for Gates being a fat cat!

NINA: That staff would still be there even with more taxes…Gates isn’t going to stop living like a king just because doing so will be a larger percentage of his net wealth.

ME: Even if that were true – and the fact that you would think that is true demonstrates a lack of understanding, IMHO, of the way that the wealthy view their finances – but even if that were true…can you say the same for the guy making a million a year because he owns eight dry cleaners and has a little socked away in stocks and currency? Will a surtax on the wealthy leave him with enough to afford that tutor he wants for his kids? Or the twice-weekly lawn care visits to keep his grass green?

NINA: But the guy who runs the dry cleaners isn’t doing all the work of those dry cleaners…he just owns some pieces of paper and handles the actual workers! Why do the people cleaning people’s clothes make minimum wage and suffer while the owner lives well – and he’d still be living well even if he couldn’t afford a tutor! He didn’t work fifty times as hard as I did this year…why should he make fifty times what I do?

ME: Ah…now we’ve gotten to the real root of your unhappiness. You believe that compensation should be related to effort, not to demand and net value. Needless to say, I believe the opposite. The orange pickers in Florida make minimum wage because anyone who is reasonably fit can pick oranges. That job is easily replaced. That may sound rough, but we don’t pay the people running dry cleaners a lot because it doesn’t take a ton of unique skills to do that and because there is a large unskilled labor force that will gladly be paid that pittance to do the work. And no…that doesn’t mean the guy who owns the franchises is taking advantage of the poor…it means he’s paying them what they need and giving them work because his entrepreneurship has created the wealth to afford it. Like it or not, there are many people out there who don’t have much earning power because they simply don’t have the abilities needed. We aren’t all created with the same gifts.

NINA: The fact that we are born with unequal abilities only proves my basic point! There are those of us who are really in need of help from those of us who have the good fortune to be gifted with unequaled talents. I have no problem with everyone making different wages, but fifty times different? Or fifty THOUSAND times different? Shouldn’t we do what we can to give the less fortunate a fighting chance to be happy?

ME: Despite what the media says daily, the vast majority of people who do grunt work for a living ARE happy. The unemployed…not so much, and I agree that this is a major problem, though I think the solution is to empower businesses to hire more by making the tax code simpler and easier to predict and by removing unnecessary regulations that make it too expensive to operate a large corporation here. But don’t fall for the Marxist line that the factory worker is miserable under the weight of the fat cat who crawled over him to get his good station in life. Most construction workers love their jobs…love being part of building something that will last a long time…most factory workers find their joy in the other parts of their lives. Most pig farmers love their land. It takes privilege and idle time to become unhappy that someone higher up than you has a nicer car. Don’t believe me? You ask Mike Rove – he’s actually made a career of touring the country talking to unskilled and lightly-skilled laborers who do the jobs most of us wouldn’t want to do. As for wage disparities…I still think you’re missing the benefits of having very wealthy folks with enough resources to hire the rest of us…but I’d also ask you who is the arbiter or fairness? What is the limit of wealth a person can acquire and have it still be fair?

NINA: Well we have to do something! We can’t rely on big businesses to give to social causes – the government has to have a role there to make sure these people live up to their obligations.

ME: (after a moment and a deep breath to avoid barking back that she completely avoided answering my questions or addressing my points) OK…well I’ll tell you that a fiscal conservative tends to believe that charity must be voluntary to achieve full participation…that long before the advent of the current big-government spending regime, big corporations gave a larger percentage of their net worth to charity than they do now to taxes, and that even today, there are plenty of examples of the wealthiest among us giving of their worth voluntarily. I mentioned Bill Gates…

NINA: Stop…I know what you’re about to say. And yes…Gates is a bad example since he spends so much on AIDS research and African infrastructure projects, but for every Gates out there, there are a hundred Steve Jobs and Bill Koch types out there who never give significantly to charity. And when they fail to do it, it’s the government’s job to force them to be better people for all our sakes.

ME: (another deep breath) Alright…say we decide that government should force rich people to be upstanding citizens and give to charitable causes – why do progressives never like the idea of forcing them to give a certain percentage to CHARITY…rather than the government? That has been proposed many times and the left always balks. They seem to think that the government is a better arbiter of what’s a valid charity than people are. I don’t think you can force people to be better and I think it’s anti-American to try to do so by fiat, but let’s follow your contention to the logical conclusion. How do we decide what is a valid and just cause?

NINA: It would be one thing if the government were in charge of charities…or kept a list of the productive charitable organizations that could best help people, but there are things that less-organizes grass roots charities can’t do that only the government can. A charity can’t provide social security. A charity can’t take care of the mentally ill with medical aid and financial assistance.

ME: Even the staunchest conservative thinks we need to protect social security and provide avenues toward affordable health care and take care of the legitimately needy as best as we can. But many of us disagree with you that other government programs are more productive than private charity once was. But that isn’t even the key point. If you want people to see it as a joy to help others, you literally cannot force them to do so. If you take it upon yourself to decide what we all need, you’re going to make choices that some of us don’t agree with…and you’re going to actively discourage us from being better citizens. Most entrepreneurs don’t balk at paying more taxes because they just want to roll in money and see it go to no good end. They balk because they think government will spend their money stupidly and they want to have control over how it’s spent. And there’s a lot of evidence to suggest that they’re right! The shear number of redundancies, scandals, pork barrel spending projects and failed government grants and bailouts should tell you all you need to know about who knows more about how to handle money – the career capitalists or the government. Besides…if we let the government pick which charities are worthy and which are not and then force us to pay for their favorites…isn’t that rather like the Soviet system in spirit, if not in total substance?

NINA: I’m not saying the government should take ownership of the corporations..that would be the Communist system. I’m saying the government should take some ownership of the available wealth…enough to guarantee that those of us who are less fortunate have a fighting chance to move up in the world.

ME: Such a thing can never be guaranteed, no matter how much money you throw at it, if the government actively prevents the wealthiest of us from moving upward to. And I see essentially no philosophical difference between government ownership of a corporation and ownership of any share of the wealth. They both lead to the same thing…government deciding how corporations should behave, spending the wealth and drawing away resources from the pockets of the people who know better how to use those resources, and keeping the rest of us from being able to afford to start up a business ourselves (because the cost of doing business with the government on your shoulder is too high).

Obviously, neither of us was going to convince the other…but we gave it our best shot…and I think I fleshed out the mind of a true progressive quite nicely. They honestly believe that the mere possession of large wealth usually implies evil deeds were done to acquire it. They believe that business people know less about social needs than politicians. They trust only the government (because they hilariously see that entity as impartial) to make decisions in our best interest. And they are obsessed with equality of outcome, rather than process as my co-author suggested.

Later in this same conversation Nina admitted to knowledge of several ways she could/would use to cheat the system if she had to, saying that she didn’t care if it would hurt other people or be unfair because the system itself was unfair and deserved to be undermined so long as the wage gap was this large. I coldly rebuked the notion that morality should take a back seat to ideology and moved on…but it cost her a lot of my respect going forward, I must honestly say.

The next post will discuss a center-leftist’s take on the need for government run healthcare, artistic funds, transportation, and regulatory agencies, among other things.